Financing Social Protection Systems/Floors

1. Financing Social Protection Systems/Floors Isabel Ortiz, Director Social Protection International Labour Organization SPIAC-B Algiers, 27 April 2017

2. AAAA Global Social Compact 2015 • The Addis Ababa Action Agenda (AAAA) agrees to a new social compact to deliver social protection and essential public services for all. • Financing sources: (1) National budgets – monitored by system of national accounts and IMF Government Finance Statistics (2) Development Aid – by OECD DAC CRS Codes and (3) Innovative sources of development finance. Social Compact Social Protection for All Social Services for All Transfers in cash/in kind pensions for older persons, disability benefits, maternity/ child allowances, support for those poor/without jobs Ministry of Labour, Social Security and Welfare SDGs 1.3 ++ Housingslum upgrading Ministry Housing SDG 11 Health Ministry of Health SDG 3 Water & Sanitation Ministry of Public Works SDG 6 Education Ministry of Education SDG 4

3. Limited ODA, Below Commitment 0.7% GNI Social Protection (OECD DAC Code 16010) Low Source: OECD DAC, 2016

4. Development Aid Necessary • Particularly in low income countries • Social Protection: Limited ODA, urgent need of funding • While the recurrent costs of socialprotection floors are affordable in the majority of developing countries: ILO estimates in 90 developing countries that recurrent resources needed to operate cash transfers and administrative costs amount to 2.9% GDP as an average • Start-up investments are needed: Initial investments for: • technical advisory services (desing, legal, actuarial, financial) • computers/ICT • building of administrative, actuarial and statistical capacities, including training to government officials • Calls for a global fund or global trust funds (De Schutter/Sepulveda, ILO, Global Coalition for Social Protection Floors), or a global commitment/initiative, for social protection floors

5. Cost of Social Protection Floor in 90 Developing Countries, in %GDP Source: ILO calculations; the Social Protection Floor includes universal child and orphan benefits, maternity benefits, disability pensions, support for those poor and without jobs, old-age pensions plus the administrative costs, based on national poverty lines.

6. Complemented by Innovative Sources of Development Finance To complement -- never replace – ODA. Examples: • Airline ticket levy, exists in about 9 countries, earnmarked for global health initiative UNITAID • Financial Transaction Taxes (FTT), already exist in some G20 countries (EU 2011 estimates FTT could raise between €16-€400 billion) • Arms trade taxes: 10% tax on the international arms trade could accrue up to US$5 billion annually (WHO 2009b) • Proposals for a World Solidarity Fund • Issuing new Special Drawing Rights (SDRs), UN proposals, would also serve to protect countries from the risk of financial crisis • Voluntary donations using new methods (percentage of credit card sales, lotteries, etc),

7. NATIONAL BUDGETS: Fiscal Space for Social Protection Floors Exists Even in the Poorest Countries • There is national capacity to fund social protection floors in virtually all countries. There are many options, supported by UNand IFIs policy statements: • Re-allocating public expenditures • Increasing tax revenues • Expanding social security coverage and contributory revenues • Lobbying for increased aid and transfers • Eliminating illicit financial flows • Using fiscal and foreign exchange reserves • Managing debt: borrowing or restructuring debt • Adopting a more accommodative macroeconomic framework (e.g. tolerance to some inflation, fiscal deficit) Source: ILO, UNICEF, UNWOMEN 2015: “Fiscal Space for Social Protection: Options to Expand Social Investments in 187 Countries”

8. National Fiscal Space Strategies for Social Protection: Country Examples Source: ILO, UNICEF, UNWOMEN 2015: “Fiscal Space for Social Protection: Options to Expand Social Investments in 187 Countries”

9. Shaping the Global Commitment on Social Protection • Coordinated support for Social Protection Floors: • A “Global Fund” – proposals by de Schutter/Sepulveda, ILO, Global Coalition Social Protection Floors • Trust Funds: • ILO Flagship Programme on Social Protection Floors • Multi donor multi partner trust fund (MPTF) • Multi-stakeholder dialogue – more innovative sources of development finance • Monitoring Financial Commitments • Monitoring national budgets – System of National Accounts and IMF Government Finance Statistics (GFS) • Monitoring Development Aid – OECD DAC CRS Code 16010 Social/ welfare services • Monitoring innovative sources of finance

10. FfD Follow-Up 2016 and 2017 • The ECOSOC Forum on Financing for Development follow-up (FfD Forum) is an intergovernmental process with universal participation mandated to review the AAAA and other financing for development outcomes and the means of implementation of the Sustainable Development Goals (SDGs). • The 2017 ECOSOC FfD follow-up Forum will be held from 22 to 25 May 2017 – check: http://www.un.org/esa/ffd/ • Inter-agency Task Force - The major substantive input to the FfD Forum is prepared by the FfD Inter-agency Task Force (IATF), in 2017, the thematic report includes a chapter on social protection (GOOD!)

11. High-level Political Forum (HLPF) • The High-level Political Forum, United Nations central platform for follow-up and review of the 2030 Agenda and the SDGs • Voluntary national reviews at the UN (44 countries in 2017) • Next HLPF on 10-19 July 2017. The theme will be "Eradicating poverty and promoting prosperity in a changing world". LPF TIMELINE • 2019: Empowering people and ensuring inclusiveness and equality - SDGs 4, 8, 10, 13, 16 • 2018: Transformation towards sustainable and resilient societies - SDGs 6, 7, 11, 12, 15 • 2017: Eradicating poverty and promoting prosperity in a changing world- SDGs 1, 2, 3, 5, 9 and 14

12. Thank You